Current account changes

It compares the U.S. dollar index futures contract’s average gains and losses shown to its median values, and breaks down current account deficit reports by whether the deficit increased, declined, or remained the same from the prior quarter. Each period’s benchmark move and percentage of gains are also shown for each category.

The first column shows where the dollar index futures closed on announcement day relative to its daily range. For example, if the dollar closed at the midpoint between its intraday high and low, the “Close location” is 50; if it closed at its low, the value is 0, and so on.

The table’s overall median and average moves are relatively consistent, which confirms patterns. Nine of the 11 periods also have a better chance of losses than gains, including a 65-percent probability of losses on announcement day.

The dollar seemed to anticipate shrinking deficits by rising 0.12 and 0.36 percent in the fourth and third weeks before current account releases, but these gains turned to losses as the release date approached.

It also reveals a surprising twist: The dollar posted its steepest average drop (0.30 percent) upon news of smaller deficits, and it continued to decline over the following 15 days. It shows the average performance of the table’s three main categories (overall, deficit increases, and decreases) and confirms that the dollar initially dropped further after news of shrinking deficits than growing ones. However, these price moves are based on a relatively small sample size (12).